Our opinion: Not all that VY money is going to Windham County
When the bean counters at Entergy calculated the continued operation of Vermont Yankee nuclear power plant was no longer economically viable, they entered into talks with the big thinkers in state government.
The result was an agreement that assigned a big chunk of money to Windham County for economic development. Entergy agreed to pay out $10 million in $2-million increments over five years to the Vermont Agency of Commerce and Community Development to subsidize job creation to hopefully replace the 600-plus jobs lost when Yankee ceased operations. Through fits and starts, the state devised a way for disbursement to work, including an application process and how the money would be distributed. Late in 2014, $814,000 of the first $2 million was awarded to five business and agencies as revolving loans; that is, the money was given as low-interest loans. The idea, according to the state, was not to run through the money over five years and have nothing to show for it. The governor and his agents decided it would be best to create a revolving loan fund so that the money would stay available for economic development as long as it is needed. This decision caused some consternation, as critics of the decision didn't see it as in the best interests of Windham County. The whole shebang was sent back for reconsideration, and the next allocation of funds is expected soon.
In addition, Entergy agreed to release from escrow more than $5 million in Clean Energy Development Funds it had squirreled away when tempers were flaring between the state and Entergy. Half of that amount was designated for projects in Windham County.
However, buried in the settlement agreement reached between Entergy and the state was Paragraph 16, which states, in toto, "In consideration of all provisions of this Agreement, including dismissal of litigation described above, for calendar year 2015 (Entergy Vermont Yankee) shall make a one-time payment of $5 million on or before April 25, 20I5, to the State of Vermont Department of Taxes. Such payment shall not satisfy any obligation(s) EVY may have now or in the future for: amounts owed to any city or town, including, without limitation, the Town of Vernon or the Town of Brattleboro; EVY's obligation to make in January 2015 the fourth quarterly payment of the generation tax owed for calendar year 2014 operations and, in the event that it generates electricity subsequent to 2014, EVY's obligation to pay the generation tax with respect to such subsequent quarters; or EVY's obligations to pay state income, withholding, and sales and use taxes. If a Vermont law is enacted subsequent to execution of this Agreement that imposes on EVY a state property tax or obligation to make payments in lieu of state property tax related to the VY Station effective in calendar year 2015, the $5 million payment required under this paragraph for calendar year 2015 shall be an offset against any such amount owed in calendar year 2015."
Unless you're an attorney or an accountant, your head is probably spinning right now trying to figure out just what that means. The Reformer turned to Chris Recchia, the Commissioner of the Vermont Department of Public Service, to explain it.
"Entergy was responsible for paying a generation tax, as all utilities operating in Vermont do," he said. In past years, that tax had been between $10 and $13 million and went into the state's general fund. "When Vermont Yankee ceased operations it was no longer generating electricity, but we wanted to provide some benefits to the general fund in 2015."
Recchia said he understands how folks in Windham County might want a chunk of those funds. "But we negotiated pretty good terms to get the county a substantial amount of funds over the next five years. This was a one-time tax payment."
Considering how much money the state spent defending itself in a lawsuit filed by Entergy prior to the plant's closure, it's not a big surprise Vermont is happy to get some of its money back. But to some people in and around Windham County, the $5 million appears to be nothing more than shakedown money. Nothing wrong with that, if you remember how Entergy acted in the years leading up to the plant's closure. It's just that some in Windham County wish they were getting a little bit of that $5 million, too.
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